Chanel: Creating an Empire

As speculation continues to swirl that luxury goods maker Chanel is pondering an IPO or a merger with one of its larger peers (a rumour that the house has continuously denied), it is expanding at an accelerated rate into new territories.

Over the last two years, Chanel has also gone on a buying spree, expanding its portfolio outside its fashion & accessories, eyewear, fragrance, skincare, makeup, fine jewellery, and watches portfolio. From wineries to sustainable startups, its investments have broadened the company’s divisions, as well as its power.

“They are clearly very big and could play a more relevant role in the industry. But getting to be an LVMH requires a lot more homework,” Luca Solca, Senior Research Analyst, Luxury Goods at Bernstein, told NOWFASHION when asked if Chanel could ever compare to its larger leather goods-to-spirits French peer, in terms of size, revenues, and range of luxury goods.

Owned by the notoriously secretive Wertheimer family, the French maison, founded by legendary designer Coco Chanel, moved up the ranks in marketing consultancy Interbrand’s 2019 ranking of top global brands, ranking as the number two luxury brand after Louis Vuitton and beating Hermès and Gucci, the fastest-growing luxury brand on the list. Chanel’s annual revenues totalled $11.12 billion in 2018, up 10.5 percent versus a year earlier. The family reportedly financed $1 billion in investments in 2018.

 

According to Interbrand, Chanel has also exploded in terms of brand value – $22 billion in 2019 compared to only $6 billion in 2009. 


According to press reports, Chanel purchased the Domaine de l’Île winery located on the small island of Porquerolles just off France’s southern coast in the region of Provence. The 75-acre organic vineyard produces red, white, and rosé wines.  

The Wertheimer brothers – Alain and Gérard, who own the controlling interest in the House of Chanel – already own three vineyards in France and one in Napa. Yet, the Domaine de l’Île purchase marks a real foray into the world of spirits for the company – such a move could render it more competitive alongside luxury peer LVMH.

Chanel’s press office declined to comment on the matter.

Some of the investments over the past year were meant to strengthen the company’s core leather goods division, as the industry faces a shortage in quality hides and artisanal craftsmanship. According to reports, Chanel bought a stake in printed leather specialist Italian tannery Samanta; a stake in Renato Corti, a company that owns and operates leather factories in Florence and Milan; as well as investing in high-end bag maker Mabi, which also owns factories in Florence and San Daniele, Italy.  

Before the environmental crisis peaked and the sustainability wave took off, luxury companies like Hermès were scooping up exotic hide farms all over the world to control the price of high-ticket hides. Today, however, tech and science companies at the forefront of sustainability are high in demand and hard to come by. 
 
With an eye on creating a more sustainable business, in 2018, Chanel bought into Finnish group Sulapac which manufactures eco-packaging made with biodegradable materials and bioplastics made of woodchips and natural adherents.

Earlier this year, Chanel bought a minority stake in Evolved by Nature, a startup based just outside of Boston which was founded by two Tufts alums, biomedical engineer Rebecca Lacouture and chemist Gregory Altman in 2013. The duo has already garnered heavy investments from the Kraft and Disney families and specialises in separating silk proteins from discarded silkworm cocoons for cosmetics and eco-friendly apparel coatings.

“Some of the most interesting developments are seemingly appearing from Chanel, which – after more than a century of secrecy – has very recently published all of its figures. We can only wonder if Chanel has done that because it is possibly considering an IPO or a high-profile merger with one of its peers. An LVMH-Richemont merger would put the final word into industry consolidation,” Solca said in a report published this week.

 

SHARE
  • Facebook
  • Twitter
  • Pinterest
SIMILAR ARTICLES
Moschino’s New York State of Mind
By Robin Torres
Monday night was all “New Yawk” at Moschino’s first show in the Big Apple. If the giant branded...
By Robin Torres
Monday night was all “New Yawk” at Moschino’s first show in the Big Apple. If the giant branded Metro Pass cards mailed to guests as invitations and the choice of venue hadn’t made that clear enough, the collection certainly did. Hosted on subway cars at the New York Transit Museum in Brooklyn,...
Monday night was all “New Yawk” at Moschino’s first show in the Big Apple. If the giant branded Metro Pass cards mailed to guests as invitations and the choice of venue hadn’t made that clear enough, the collection certainly did. Hosted on subway cars at the New York Transit Museum in Brooklyn, which took over a year of negotiation to lock in, creative director Jeremy Scott presented the...
Science Says Plastic Still Has A Place in Fashion
By Sofia Celeste
Whether or not brands have done away with virgin plastics and/or are using nylon yarns made from...
By Sofia Celeste
Whether or not brands have done away with virgin plastics and/or are using nylon yarns made from old PET plastic bottles, the earth is still cluttered with such an abundance of non-biodegradable plastics, it’s thought to be enough to wrap the globe in saran wrap… not once, a few times.“Plastics...
Whether or not brands have done away with virgin plastics and/or are using nylon yarns made from old PET plastic bottles, the earth is still cluttered with such an abundance of non-biodegradable plastics, it’s thought to be enough to wrap the globe in saran wrap… not once, a few times.“Plastics are here to stay,” said Svetlana Boriskina MIT Research Scientist and manager of the school’s MechE...
How Sneaker Apps are Winning
By Robin Torres
At a time when there is constant talk of a looming recession, e-commerce seems to be defying the...
By Robin Torres
At a time when there is constant talk of a looming recession, e-commerce seems to be defying the idea that retail is broken. According to statistics published by Internet Retailer last month, retail e-commerce sales worldwide amounted to $3.53 trillion in 2019 – up from $2.93 trillion in 2018...
At a time when there is constant talk of a looming recession, e-commerce seems to be defying the idea that retail is broken. According to statistics published by Internet Retailer last month, retail e-commerce sales worldwide amounted to $3.53 trillion in 2019 – up from $2.93 trillion in 2018 – and revenues are projected to grow to $6.54 trillion by 2022.This continued growth is, in part, due...
Pitti Adds Luxury Sex Toys to Lineup
By Elisa Carassai
Pitti Uomo has announced they will be including luxury sex toys in their Unconventional section...
By Elisa Carassai
Pitti Uomo has announced they will be including luxury sex toys in their Unconventional section of their fair.The Unconventional section aims at offering a selection of fashion forward brands that range from gritty to hyper-tech, from athletic-minded to gender-free. The selection is hosted in the...
Pitti Uomo has announced they will be including luxury sex toys in their Unconventional section of their fair.The Unconventional section aims at offering a selection of fashion forward brands that range from gritty to hyper-tech, from athletic-minded to gender-free. The selection is hosted in the Archivi section of the fair and will feature set design by Milanese architecture firm, Storage...
Sustainability and Young Talent at Modaportugal
By Rebecca Voight
Without young designers and sustainability, fashion has no future. These were the take-home...
By Rebecca Voight
Without young designers and sustainability, fashion has no future. These were the take-home points from the third edition of the MODAPORTUGAL Futures conference, a summit that was focused on sustainability and dedicated to promoting fresh design talent.The event, held last week in Porto’s...
Without young designers and sustainability, fashion has no future. These were the take-home points from the third edition of the MODAPORTUGAL Futures conference, a summit that was focused on sustainability and dedicated to promoting fresh design talent.The event, held last week in Porto’s Alfândega convention center, included a competition of 29 fashion and footwear students from 13 top...
The Rubchinskiy Perspective
By Gianluca Cantaro
In the same year of the 20th anniversary of the fall of the Berlin Wall and the end of the Iron...
By Gianluca Cantaro
By Gianluca Cantaro
In the same year of the 20th anniversary of the fall of the Berlin Wall and the end of the Iron Curtain, Russian designer Gosha Rubchinskiy and Vetements (actually headed by Georgian designer Demna Gvasalia), two of the most impactful brands in recent fashion history, and both from the former...
In the same year of the 20th anniversary of the fall of the Berlin Wall and the end of the Iron Curtain, Russian designer Gosha Rubchinskiy and Vetements (actually headed by Georgian designer Demna Gvasalia), two of the most impactful brands in recent fashion history, and both from the former Soviet Union, unexpectedly reshuffled their successful plans to start new and challenging ventures that...
Kawakubo's Opera Debut
By NOWFASHION
Rei Kawakubo’s “Transformation and Liberation” project will finally come to life at Vienna's...
By NOWFASHION
By NOWFASHION
Rei Kawakubo’s “Transformation and Liberation” project will finally come to life at Vienna's State Opera in all its majestic, abstract splendour, Sunday, Dec. 8, in the world premiere of Virginia Woolf's Orlando.This modern-day portrayal of Orlando is a marriage of great minds: Woolf, Kawakubo...
Rei Kawakubo’s “Transformation and Liberation” project will finally come to life at Vienna's State Opera in all its majestic, abstract splendour, Sunday, Dec. 8, in the world premiere of Virginia Woolf's Orlando.This modern-day portrayal of Orlando is a marriage of great minds: Woolf, Kawakubo and composer Olga Neuwirth, one of the most forward-thinking figures in opera today and the first...
A Slow Start for Italy’s Independent Beauty Market
By Elisa Carassai
What’s happening in the Italian beauty industry? In an ever-expanding international beauty...
By Elisa Carassai
What’s happening in the Italian beauty industry? In an ever-expanding international beauty market, where new options are emerging continuously, the Italian market seems to be lacking something that is already mainstream abroad.According to a report by market research agency Mordor...
What’s happening in the Italian beauty industry? In an ever-expanding international beauty market, where new options are emerging continuously, the Italian market seems to be lacking something that is already mainstream abroad.According to a report by market research agency Mordor Intelligence, this is a result of a highly fragmented competitive landscape made up of numerous regional and...